Charles Schwab offers new notes, cash in exchange for 4.95% notes

By Jennifer Chiou

New York, Aug. 1 - Charles Schwab Corp. announced the launch of its private exchange offer for its $750 million of 4.95% senior notes due 2014.

The company is offering a like amount of new senior notes due Sept 1, 2022 and cash. It will determine the exchange price using the 0.25% Treasury due May 31, 2014 and a spread of 37.5 basis points. Pricing will be set on Aug. 15.

Those who submit tenders for exchange prior to 5 p.m. ET on Aug. 14 will receive the $30.00 early tender consideration per $1,000 of notes.

Based on the reference yield on July 31, the hypothetical cash consideration would be $76.94 per $1,000 of notes.

Schwab will also pay accrued interest.

Completion of the offer is subject to a minimum of valid tenders for $250 million of the old notes by the early deadline. In addition, the yield on the 1.75% Treasury due May 15, 2022 may not be more than 3.8% or less than 1.25% on the price determination date.

The information agent is Global Bondholder Services Corp. (866 488-1500 or call collect 212 430-3774).

The investment and financial services company is based in San Francisco.

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